LightwaveRF PLC (LWRF): Final results

23 January 2017 LightwaveRF plc

(AIM: LWRF)

Preliminary Results for the Year Ended 30 September 2016

LightwaveRF plc ("LightwaveRF" or the "Company"), the proprietary IOT and connected devices specialist enabling the remote control and monitoring of light, heat, power and security through just one App, is pleased to present its final results for the year ended 30 September 2016.

WHAT WE DO

LightwaveRF plc ("LightwaveRF" or the "Company") pioneered smart home automation with the development of the first internet enabled devices in 2008. Today, the Company offers a market leading proprietary Internet of Things ("IoT") platform together with applications and connected devices, which provide fully integrated remote control and monitoring of light, heat, power and security. We are dedicated to making everyone's lives easier and more fulfilled through world leading smart home technology.

FINANCIAL HIGHLIGHTS

• Revenue for the year of £1.44 million (2015: £2.10 million);

• Gross profit £0.47 million (2015: £0.67 million);

   Gross margin 32.5% (2015: 31.9%);

• Loss before and after taxation at £0.84 million (2015: £0.23 million, restated);

• Investment in research and development £0.62 million (2015 £0.54 million);

• Fundraisings during the financial year £0.21 million (2015: £1.55 million);

• £1.1 million working capital facility in place through Santander;

• Post year end fundraising, completed December 2016, of £2.2 million strengthening the balance sheet net assets to £2.03 million.

• Order book as at 20 January 2017 exceeds £1.2 million at current exchange rates;

  HIGHLIGHTS Marketing

• Increased awareness and brand recognition as measured by substantially increased levels of press

  coverage, social media activity and LightwaveRF website traffic;

• First to achieve widespread market recognition for high quality voice-controlled smart home capability; and currently averaging a 4.5 stars rating (out of a maximum of 5 stars) for our Amazon Alexa integration.

  Sales and Distribution

• Expansion and further reorganisation of UK distribution capability resulting in the appointment of

  two additional distributors;

   Global installations 40,000 (2015: 35,000);

• Connected devices on LightwaveRF cloud-based platform 300,000 (2015: 200,000);

• Temperature and energy data points 60 million (2015: 56 million) per month.

  Technology

• Significant enhancement made to cloud capabilities and cloud-based IoT platform; successfully integrated with Amazon Alexa, Google Nest and IFTTT;

• Product range now 90 devices .

For further information: Contacts: LightwaveRF Plc www.lightwaveRF.com

Mike Lord, CEO [phone]

LightwaveRF Plc www.lightwaveRF.com

Kevin Edwards, CFO [phone]

562

WH Ireland Limited www.wh-ireland.co.uk

Mike Coe/Ed Allsopp (Corporate Finance) [phone]

Jasper Berry (Institutional Sales) [phone]

Chairman's statement

I am pleased to present my statement and to report on the progress being achieved at your company.

Overview

There have been a number of highlights during the financial year and subsequently. These culminated in the successful and oversubscribed fundraising completed in December 2016. New and existing investors have followed the developments made, realise the market opportunity and have offered their backing for the company to move to the next level.

We completed the first investment round with Committed Capital, the Mayfair based venture capital investor just before the 2015 financial year end. We then concentrated on improving market awareness, distribution led sales and ensuring the LightwaveRF technology continues to develop. While pursuing these objectives we recognise and seek to manage the inevitable tension between achieving short-term visible progress and the objective to build shareholder value over the medium and longer-term.

Our key strategic initiative to enable our IoT platform to operate with other cloud-based platforms is being delivered. We are now in the position of having our own proprietary platform, applications and devices as well as being able to integrate seamlessly with Amazon Alexa, Google Nest and IFTTT (If This Then That). The LightwaveRF integration with Amazon Alexa, with a market leading average of 4.5 star reviews (out of a possible maximum 5 stars) has in particular raised our profile.

We are continuing to invest in the data collection and data service provision within our IoT platform and are now providing real time temperature and energy usage information to our end user customers.

We have continued to further develop our distribution and have also begun to develop a direct to market offering through technically supported projects.

Financials

Revenue for the 2016 financial year is at £1.44 million, down on last year (2015: £2.10 million) held back as distribution was further re-organised and developed. Gross margins firmed to 32.5% (2015: 31.9%) as we continued to build on our experience and optimise our operational effectiveness. Administrative expenses were up to £1.49 million (2015: £1.07 million) reflecting planned spend on marketing and expensed research costs. The Group capitalised development expenditure of £0.51 million (2015: £0.40 million) in accordance with IAS38. The loss before and after tax was £0.84 million (2015: £0.23 million restated). The increased loss arises as a result of two thirds increased administration costs and one third reduced gross profit directly related to the revenue shortfall.

Our balance sheet has now been considerably strengthened through our post financial year end fundraising, giving a strong and stable foundation upon which to develop our business. The pro-forma group statement of equity after this fundraising is as follows:

2016 As reported Net funding proceeds 2016 Pro forma £ million £ million £ million Total shareholders equity (0.17) 2.20 2.03

I remarked last year about the importance of the board determining priorities and ensuring choices are made to ensure management time and resources are appropriately focussed. This is very much the dynamic of a technology business such as LightwaveRF plc. We recognise the enthusiasm, capability and commitment of the executive team and the relatively small support and development staff which delivers on these. As well there is in place a close knit group of key suppliers who continue to share the vision and have enabled so much to be achieved. Our thanks are due to them all.

Outlook

For a small company LightwaveRF plc continues to make significant progress to being able to build real value for shareholders. We look forward to further exploit our position in a very large market, both in terms of our own proprietary IoT platform, applications, devices and through linking with current and future cloud-based smart home platforms. So as the technology continues to develop, market awareness increase and distributor relationships build the opportunities open up still further.

Barry Gamble

Chairman